Page 30 - Bulletin Vol 25 No 2 - May-Aug 2020 - 9-2-20.pub

Article | Legal continued

To the extent you were thinking the stimulus funds would be considered only a corporate
expense (since the funds are "non-recourse"), you will still have to disclose each
"Principal" of the practice (borrower), which will include any individual owning more than
20% of the borrower, as well as any "key employee" - any individual hired by borrower to

manage the day-to-day operations of the borrower.

The specifics set forth above should not be a surprise to anyone given parameters
released and the application required for receipt of Paycheck Protection Program funding -
the forgiveness application is very similar. However, it is worth noting the specifics set
forth above, in particular, now, because we have time to prepare for the forgiveness
process and compile the necessary support for use of funds during the next few weeks
before forgiveness is available. Once your records are in order it is important to have an

ongoing dialogue with your bank representative to understand when you may commence
the forgiveness process and what information specifically your bank is going to request.
Each institution has some leeway in the parameters it chooses to deploy and documentary
support it may demand prior to granting forgiveness.

For those practices that have received more than $2 million in stimulus funds, the scrutiny
of review for forgiveness will likely be higher. However, for all participants of the
Paycheck Protection Program misuse of funds or lying on the forgiveness application is

punishable under the law, including imprisonment and/or a monetary fine. We have
already seen a few instances of severe abuse of the Paycheck Protection Program in the
news - individuals opening multiple entities to obtain loans and lying about employees to
support amount. I have no doubt that there will be many other stories of fraud and abuse
with this program for many years to come, and that after the forgiveness process is
complete, there will be an audit process thereafter to confirm forgiveness was
appropriately granted. All you must do now is document, document, document, maintain
proper records and remain in touch with your lender representative.

Jennifer Kirschenbaum, Esq., serves as counsel to NCDS, and is the managing
partner of K&K’s healthcare department. Jennifer and her team dedicate their
practice towards assisting dentists and DSOs in day to day legal operational
matters, such as purchases, sales, employment matters, partnership and
corporate agreements, licensure defense, payor issues and vendor relations.

30 | Nassau County Dental Society  www.nassaudental.org